"If the economy looks like it's going downhill now, just wait," writes Eileen AJ Connelly in today's Associated Press. And it's all because of boomers.
"Government data released Friday showed the economy is slowing down much more dramatically than economists expected. But the current economic woes will pale in comparison to the big storm that's coming, predicts Harry S. Dent Jr. in his book 'The Great Depression Ahead.'"
"'If you thought 2008 was scary, 2010 to 2012 will bring on the greatest economic and banking crisis since the early 1930s,'" Dent writes, forecasting that real estate, stocks and commodities will all fall much further than they have already. The founder of HS Dent, an economic research and forecasting company in Tampa, Fla., Dent maintains the sharpest part of the decline will last at least two years. He sees the Dow Jones industrial average falling as low as 3,800, or just over half its current value."
"The key to Dent's predictions are the various historical cycles his research has identified. The centerpiece is a 40-year demographic cycle that he says is winding down because baby boomers have started to drastically reduce their spending as they approach retirement," Connelly writes. "This change is the major factor that will drive a steep economic downturn. But it's not an isolated phenomenon, it's overlapped by other short-term, intermediate and long-term cycles that show patterns in stock market corrections, technological advances and commodity price changes, among other economic factors."